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Master Circular: Loans & Advances – Statutory & Other Restrictions (2009)

No longer current — withdrawn, no replacement on file yet

Source: Reserve Bank of India · RBI/2009-10/69 · issued 01 Jul 2009 · ~2 min read

Quick answerRBI consolidated all statutory and regulatory restrictions on loans and advances for scheduled commercial banks (excluding RRBs) as of July 1, 2009. This circular updates previous instructions and covers prohibitions on lending against bank shares, to directors, for buy-backs, and other limits.

What changed

This is an annual update of the Master Circular on loans and advances restrictions, incorporating instructions issued up to June 30, 2009. It replaces the July 1, 2008 version and consolidates all relevant circulars listed in Annex 5.

What it means for you

Banks must ensure their lending policies comply with the updated statutory and regulatory restrictions, including prohibitions on advances against own shares, to directors, and for share buy-backs. The circular also covers regulatory limits on loans to relatives of directors, officers, and sectors like real estate, gold, and sensitive commodities.

Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.

What banks were required to do at the time

Review and update internal lending policies to align with the consolidated restrictions in this Master Circular.
Ensure no advances are made against the bank's own shares or to directors except as permitted under the Banking Regulation Act.
Verify compliance with regulatory restrictions on loans to relatives of directors and senior officers.
Check that lending to sectors like real estate, gold, and sensitive commodities follows the specified guidelines.
Train credit officers on the updated restrictions and maintain documentation for audit.

Who it affects

All Scheduled Commercial Banks (excluding Regional Rural Banks), Credit departments and loan officers, Compliance and audit teams, Board of Directors and senior management

❓ Common questions

Regulatory timeline

Decoded by BankPulse 2026-06-19 09:36 IST
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn 03 Aug 2026, 04:00 IST

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

Does this circular apply to Regional Rural Banks?

No, the circular explicitly excludes Regional Rural Banks (RRBs) from its application.

What are the key statutory restrictions covered?

Key statutory restrictions include prohibitions on advances against the bank's own shares, advances to directors, restrictions on holding shares in companies, and restrictions on credit for buy-back of securities.

Where can I find the full list of consolidated circulars?

The full list of circulars consolidated in this Master Circular is provided in Annex 5 of the document.

📜 This document’s life story (1 recorded event, each backed by RBI’s own words)

Repealed by RBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)

RBI’s words: “Official withdrawal register entry #1870: DBOD.No.Dir.BC.13/13.03.00/2009-10 — "Master Circular - Loans and Advances – Statutory and Other Restrictions" dated July 1, 2009”

📜 Read the original circular — full text as issued by RBI

RBI/2009-10/69  
 DBOD No. Dir. BC 13/13.03.00/2009-10 
 July 1, 2009
 Ashadha 9, 1931(Saka) 
 All Scheduled Commercial Banks 
 (excluding RRBs) 
 Dear Sir
 Master Circular- Loans and Advances – Statutory and Other Restrictions 
 Please refer to the Master Circular DBOD.No.Dir.BC.17/13.03.00/2008-09 dated July 1, 2008 consolidating the instructions / guidelines issued to banks till June 30, 2008 relating to statutory and other restrictions on Loans and Advances. The Master Circular has been suitably updated by incorporating the instructions issued up to June 30, 2009 and has been placed on the RBI website ( http://www.rbi.org.in ). A copy of the Master Circular is enclosed.

 Yours faithfully
 (P. Vijaya Bhaskar) 
 Chief General Manager-in-Charge
 Encl:  as above
 CONTENTS 
 Para No

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2009-10/69 · issued 01 Jul 2009. The plain-English explanation above is BankPulse’s own independent summary.

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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=5113&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.